The Migration of Wall Street Players to the World of Crypto

Posted on April 29, 2019

By Natalie Lord

Wall Street and Crypto used to be incompatible worlds with supporters standing steadfastly in one camp or the other. But times are changing. There is now a migration of talent exiting Wall Street in favour of the crypto arena. And in return Wall Street is looking increasingly to crypto waters for hot hires.

As
far back as 2015, Santander InnoVentures and other companies called for banks,
financial institutions and Fintech businesses to work collaboratively to reboot
the banking and financial services industry.

In
February of that year, Timo Schlaefer, led the exodus. Schlaefer, a former
Goldman Sachs Executive Director announced the launch of Crypto Facilities, a
London-based brokerage and Bitcoin derivatives trading platform, where he took
the role of Founder and CEO. Just a few months ago, the company announced that
it had been bought by Bitcoin Exchange Kraken.

“It has been our mission to build the most sophisticated,
powerful and user friendly cryptocurrency trading platform. Teaming up with
Kraken allows us to innovate the next generation of products and tremendously
boosts the value we are able to provide to our clients,” Schlaefer said of the
move.

Jaron Lukasiewicz also abandoned Wall Street,
tempted by the lure of the crypto space. He left The CapStreet Group in late
2012 to become Founder and CEO of Coinsetter. He said he decided to transition
because: “A lot of people are entering the Bitcoin space as the sector has
reached an overall level of funding that’s hard to ignore.” In 2016, Kraken announced it had purchased
Coinsetter in one of the larger mergers of noteworthy brands in the Bitcoin
ecosystem.

Other leading financial professionals who left Wall Street for crypto
include Paul Chou, formerly of Goldman Sachs, who became Founder and CEO of
Ledger X; and Henri Chan, previously of Deutsche Bank, UBS and Morgan Stanley
who took the role of COO at Airbitz, the digital wallet platform. Blythe
Masters left JP Morgan Chase to create the modern credit default swap, a
derivative used to trade credit risks at blockchain company, Digital Asset
Holdings. She is currently Chairman of the Governing Board of the Linux
Foundation’s open source Hyperledger Project, a member of the International
Advisory Board of Santander Group and an Advisory Board Member of the US
Chamber of Digital Commerce.

She spoke at a conference on Exponential Finance in New York in 2015
where she said that the market for financial blockchain applications would
ultimately be measured in the trillions. “How seriously should you take the
blockchain?” Masters asked. “About as seriously as you should have taken the
concept of the Internet in the early 1990s. It’s a big deal.”

In another marriage
between Wall Street and crypto late last year, Coinbase
announced it had welcomed Charles Schwab Director, Chris Dodds, to its Board. Charles Schwab is one of
the largest banks and brokerage firms in the United States with US$3.3 trillion
in assets under management. Coinbase is the largest U.S.-based digital
currency exchange.

At the same time Coinbase announced the
appointment of Jonathan Kellner as Managing Director of its Institutional
Coverage Group. Kellner was formerly CEO of Instinet. Earlier this year,
however, he was poached by Members Exchange MEMX where he has assumed the role
of CEO.

Tony
McKay, Founder and CEO of Kryptos-X, is another crypto prophet, leaving his
role as CEO of Instinet Europe to become CEO and Chairman of Chi-X before
launching Kryptos-X.

This is likely only the start of the migration of the best and brightest talent from Wall Street to the gilded blockchains of the crypto world. It’ll be interesting to see who will be next.